Desigualdad y como buscar un cambio

Desde hace 10 años, la compañía Credit Suisse publica el Global Wealth Report, cuyo objetivo es proporcionar las mejores estimaciones disponibles de las tenencias de riqueza de todo el mundo.

Gracias al equipo de research de Credit Suisse podemos saber que en Estados Unidos se encuentran el 40% de los millonarios de todo el mundo y el 40% de los que se encuentran en el 1% superior de la distribución de la riqueza mundial.

Si bien la riqueza en China comenzó desde una base más baja, creció a un ritmo mucho más rápido.

También podemos saber sobre la evolución de la desigualdad.

La mitad inferior representa menos del 1% de la riqueza global
El 10% más rico posee el 82% de la riqueza global
El 1% superior posee el 45%

Como resultado, el 1% de las personas con mayor patrimonio del mundo aumentó su participación en la riqueza mundial.

Si analizamos en profundidad porque se produce esto, podemos encontrar que hay algunas reglas que están “preparadas” para beneficiar al porcentaje que más recursos y riqueza tiene.

Para entender por qué digo esto, tenemos que repasar brevemente la historia financiera de USA.

En 1933, luego de la crisis bursátil o gran depresión, se aprobó la ley que regula el Mercado de Valores con el objetivo de proteger a los inversores frente a la pérdida de dinero. Aseguró la transparencia en los estados financieros y restringió el acceso a las inversiones denominadas de “alto riesgo”.

Solo quienes entren en la calificación de “inversor acreditado”, podrían invertir en determinados activos de los catalogados como “riesgosos”.

En aquel momento se esperaba que los inversionistas acreditados tuvieran conocimientos financieros y, por lo tanto, no necesitaban protección alguna a la hora de invertir su capital. O visto de otra manera, la única condición que cumplian estas personas es que tenían que ser educados e inteligentes sobre las inversiones, conscientes de los peligros y estar preparados para manejar las posibles pérdidas.

Por el otro lado encontrábamos una segunda creencia, las personas con ingresos más bajos se mantenían más seguras al no aventurarse en las potenciales pérdidas, incertidumbre y riesgo de este tipo de inversiones.

La SEC (el regulador de los mercados de USA) requiere que un inversionista acreditado tenga un patrimonio neto de U$S 1.000.000.- o un ingreso anual mínimo de U$S 200.000.- durante los últimos dos años o U$S 300.000.- en ingresos anuales combinados para los cónyuges.

Adicionalmente existen compañías de la industria financiera que también son consideradas inversores acreditados, como bancos y compañías de seguros, entre otros.

Todo quien no pudiera cumplir con estos requisitos se lo consideraba un inversor “no acreditado”, es decir aproximadamente el 90% de la población de USA.

Como demuestra el estudio de Credit Suisse, Estados Unidos tiene la mayor cantidad de miembros del grupo de riqueza global del top 1%, y actualmente representa el 40% de los millonarios del mundo. El número de personas de UHNW (Ultra High Net Worth) con una riqueza superior a U$S 30 millones es aproximadamente cuatro veces mayor que el del país que lo sigue en el ranking, China.

El número de personas con más de U$S 1.000 millones de patrimonio en Estados Unidos ha aumentado en la última década, de 267 en 2008 a 607 en 2018. La quinta parte más rica de los estadounidenses posee el 88% de la riqueza del país.

No solo que los ricos se han vuelto más ricos, sino que también más rápido.

A pesar de que el objetivo principal de la SEC es proteger a los inversores de la pérdida de dinero, también fueron una parte necesaria para lograr esta desigualdad. Persiguiendo este objetivo lograron que las inversiones en emprendimientos o startups, que es una de las inversiones que mejores resultado demostraron a lo largo de la historia, sea una clase de activos únicamente para personas “ricas” o de alto patrimonio.

No solo se le incrementó la dificultad para obtener el capital necesario a los emprendedores sin redes de networking o redes de contactos que facilitasen el acceso a inversores ángeles. De esta forma los emprendedores se encontraron limitados con las opciones para hacer “fundraising” y de quienes podrían obtener ese capital necesario.

La ley fue efectiva para ayudar a los ricos a enriquecerse más (a través del acceso a mejores oportunidades de inversión de mayor rendimiento y consecuentemente de mayor riesgo) y a los “pobres” seguir siendo pobres al no tener acceso a inversiones que generan múltiplos de retorno por encima de la media del mercado. Inversiones que pueden significar un cambio en la vida de los inversores que son parte de las mismas.

Si no puede participar en las oportunidades de inversión de mayor riesgo, pero que a su vez son las que generan mayores retornos … ¿cómo se puede crear riqueza?

Hoy en día gracias a la tecnología y las nuevas regulaciones podemos utilizar un concepto no tan nuevo (pueden leer sobre esto en ambos posteos previos – Breve historia sobre el crowdfunding o financiamiento colectivo y La breve (o no tan) historia del Equity Crowdfunding -) como el crowdfunding.

El análisis pasa por cómo aprovechar el poder de los pequeños inversores, el gran impacto que tienen a la hora de construir nuevas empresas y, gracias a esto, generar resultados positivos y riqueza en las partes intervinientes.

La inversión en startups o emprendimientos está evolucionando, atravesando un crecimiento natural que se traduce en nuevas alternativas para inversores “micro-ángeles” y que les brinda a los fundadores nuevas alternativas a la hora de recibir inversión, más allá de los actores tradicionales del ecosistema emprendedor, como lo son las incubadoras, aceleradoras, fondos de capital emprendedor o venture capital.

Coronavirus, Economic Impact, Startups & Venture Capital

At the time of this writing, COVID-19 (aka Coronavirus) has infected more than 525.000 people and has killed more than 23.000.

Two students at Carnegie Mellon University developed Covid Visualizer to provide a simple, interactive way to visualize the impact of COVID-19. You can check each country or territory to see cases, deaths, and recoveries.

China’s experience so far shows that the right policies make a difference in fighting the disease and mitigating its impact through containment, but at a significant economic cost.

Coronavirus is having a profound and serious impact on the global economy, public markets and leading corporations.

The S&P, FTSE and Dow Jones Industrial Average have all seen huge falls since the beginning of the year.

And because of that, central banks in several countries have cut interest rates trying to encourage spending, and of course, to boost economy.

Travel and tourism industry is having an enormous impact, ranging from hotel and cruise ship quarantines to airlines halting flights in some regions. According to the World Travel and Tourism Council (WTTC), the sector could shrink by up to 25% in 2020.

For example, the USA travel and tourism industry could lose at least U$S 24 Bn. in foreign spending this year because of the rapidly spreading coronavirus and up to 50 million jobs could be lost in the industry worldwide because of the pandemic.

One of the well-known Venture Capital firms in USA, Sequoia Capital, sent a memo to the portfolio companies advising them to prepare for the worst.

It refers to Coronavirus as “the Black Swan of 2020” and give founders & managers some insights of the challenges that companies in frontline countries are facing:

Drop in business activity.
Supply chain disruptions.
Curtailment of travel and canceled meetings.

It also advise the portfolio companies to “question every assumption about your business.”

Cash runway. Do you really have as much runway as you think?
Fundraising. Private financings could soften significantly, as happened in 2001 and 2009.
Sales forecasts. Even if you don’t see any direct or immediate exposure for your company, anticipate that your customers may revise their spending habits.
Marketing. With softening sales, you might find that your customer lifetime values have declined, in turn suggesting the need to rein in customer acquisition spending to maintain consistent returns on marketing spending.
Headcount. Given all of the above stress points on your finances, this might be a time to evaluate critically whether you can do more with less and raise productivity.
Capital spending. Until you have charted a course to financial independence, examine whether your capital spending plans are sensible in a more uncertain environment.

“Having weathered every business downturn for nearly fifty years, we’ve learned an important lesson — nobody ever regrets making fast and decisive adjustments to changing circumstances,”
Sequoia Capital`s Memo

And of course that after the Sequoia Capital memo founders all around the world are, understandably, freaking out. It’s hard enough to raise money in a healthy economy, let alone when the stock markets are tanking globally.

It’s obvious that VCs will not stop investing, but it’s also true that VCs will become more selective on their deals, they will take a bit more time to get to know and diligence the business, and the “investing grade bar” will be higher.

According to CB Insights forecasts, funding will slow down during the next quarters, with some even feeling that “disinvestment” will be heard more often in the countries that have been hit hardest.

Due to the lockdown of Universities, support offered by academic accelerators and incubators will be off the cards.

Public grants and funding from national and supranational organisations may be a more stable route to follow.

For example, the French government has announced a U$S 4.3 Bn. plan to support a startup ecosystem struggling to survive the COVID-19 pandemic that has shut down the nation’s economy.

Startups will also need to focus on their own sustainable model and bootstrap. Most of them will need to find a way to keep on growing even if they can’t access fresh capital.

USA Largest Funding Rounds in 2019

Only one USA company raised U$S 1 Bn. in just one funding round in 2019.

There are four main sectors that are attracting funding: FinTech, PropTech, InsurTech or InsureTech and Automation. All are seeing particular traction at the late stage, where checks are largest.

Fintech And Banking

Lot of startups decided to become a bank, and lots of venture capitalist decided to write a check to those startups.

Much of the funding went to “neobanks”, banking focused startups and mobile payments focused startups.

PropTech – Real Estate And Property Management –

Besides of WeWork´s implosion and its ill-fated IPO, other trendlines for the real estate startup sphere this year have been pretty positive, specially less capital-intensive areas of “PropTech” .

Insurance

Insurance is a startup sector that’s been growing steadily for a few years now. Three to five years ago a huge wave of seed-stage insurance startups were launched, and now they’re seeking ever-larger later-stage rounds. Corporate venture arms of established insurance companies are also active in the space, contributing to rising valuations.

Automation

Automation is getting technology to do something that used to require a human and automation software developers are securing rising sums of venture capital.

The 24 largest funding rounds of 2019 totalized U$S 10.092.- millions.

12. Automation Anywhere U$S 290 M

https://www.automationanywhere.com/

Industry: Automation

11. Wish U$S 300 M

https://www.wish.com/

Industry: E-Commerce

11. Reddit U$S 300 M

https://www.reddit.com/

Industry: Social

11. Opendoor $300.0M

https://www.opendoor.com/

Industry: PropTech

11. Affirm U$S 300 M

https://www.affirm.com/

Industry: Fintech

11. Carta $300.0M

https://www.carta.com

Industry: Fintech

11. Impossible Foods U$S 300 M

https://impossiblefoods.com/

Industry: FoodTech

11. KnowBe4 U$S 300 M

https://www.knowbe4.com/

Industry: Security

11. Automattic U$S 300 M

https://www.automattic.com/

Industry: Web Development

11. Samsara U$S 300 M

https://www.samsara.com/

Industry: IOT

11. RigUp U$S 300 M

https://www.rigup.com/

Industry: Marketplace

10. Vacasa U$S 319 M

https://www.vacasa.com/

Industry: PropTech

9. Root Insurance U$S 350 M

https://www.joinroot.com/

Industry: InsureTech

8. Compass U$S 370 M

https://www.compass.com/

Industry: PropTech

7. Databricks $400.0M

https://www.databricks.com/

Industry: Analytics

7. Convoy U$S 400 M

https://www.convoy.com/

Industry: Logistics

7. CloudKitchens U$S 400 M

https://www.cloudkitchens.com/

Industry: PropTech

6. PAX Labs U$S 420 M

https://www.pax.com/

Industry: Cannabis

5. Clover Health U$S 500 M

https://www.cloverhealth.com

Industry: InsureTech

5. Chime U$S 500 M

https://www.chimebank.com

Industry: FinTech

4. UiPath U$S 568 M

https://www.uipath.com/

Industry: Automation

3. Bright Health U$S 635 M

https://brighthealthplan.com/

Industry: InsureTech

2. Nuro U$S 940 M

https://nuro.ai/

Industry: Autonomous Vehicles

1. Flexport U$S 1 Bn.

https://www.flexport.com/

Industry: Logistics

2018´s Industry Recap and 2019 hottest industries for Venture Capital

2018 was a historical year. Last year saw the highest level of venture capital funding since 2000, the last year of the dot-com bubble.

According to data published by PitchBook and the National Venture Capital Association, Venture Capital firms spread roughly U$S 131 Bn. across 8.949 deals.
The previous record was a $100 million total notched in the year 2000.

More than a half of the total capital invested came from U$S 50 M (or more) deals. This boosted the average deal size and valuations across every investment stage and series last year. But because venture investors are paying so much up front, it’s becoming harder to profit.

382 fundings were U$S 100 M (or more) “megarounds,” up from 266 in 2017, with 184 of those coming from the U.S.
In terms of “unicorns,” companies with a valuation of at least U$S 1 Bn., the U.S. saw the creation of 53 new ones in 2018 versus 29 in 2017.
The fourth quarter alone saw 21 “unicorn births,” the highest ever recorded in a single quarter.

Venture capital investments in Asia rose 42% in 2018 versus 2017 with an 11% increase in the amount of money invested. Asia broke records with a 35% in “megarounds”, to 162, and a 60% jump in the creation of unicorns, with 40 coming of age during the year.

California, Massachusetts, and New York continue their dominance of venture investment activity, attracting 79% of total U.S. capital invested and 53% of the number of U.S. deals completed last year.
VC funding in the San Francisco region jumped 55%, to U$S 28 Bn., and New York funding reached U$S 13 Bn.
Venture Capital firms and investors point to increasing operating costs and higher valuations in those three states, signaling optimism for more investment in emerging ecosystems, which also have the benefits of a growing talent pool, maturing networks and ecosystems, and more favorable pricing.

VC Trends

Artificial intelligence, digital health and financial technology companies led the investment portfolios, with AI-related funding jumping 72%, to U$S 9.3 Bn.

Software continues to eat the world but life science activity has seen significant growth.
More than U$S 23 Bn. was invested across 1,308 deals in life science startups, a record high for both metrics.
Healthtech drew a significant portion of angel/seed investing in 2018Q4, highlighting investor interest in funding groundbreaking technologies to meet some of the biggest challenges and opportunities in the sector.

Governments and Venture Capital

Several governments around the world have started equity co-investment programs to bridge the financial gap by injecting Venture Capital (VC) to businesses that do not have sufficient capital but they have high potential. These hybrid (public/private) programs still engage private sector VC firms as a channel through which public support and a large amount of capital is invested.

Hybrid Scheme in the United States

In the U.S., models of the Small Business Investment Companies (SBIC) program, such as, hybrid schemes have been launched. It involves a participation by the state as a public guarantor or a special liability partner (LP) for the large part of the total capital raised for investment. Subsequently, full operational autonomy is entrusted to the general partnership (GP) by the state once the investment eligibility guidelines are agreed upon. This is done to attract investment returns to the investors, i.e., the LPs.

These models have been widely adopted by a large number of governments since the collapse of dot.com bubble that violently shook VC funding raising. Moreover, developing countries have also started showing interest in such models to encourage innovation and new startups.

Hybrid Venture Capital Schemes – The U.K. and Australia

Other developed countries, including the U.K. and Australia, also followed the SBIC models and designed their own Hybrid Venture Capital Schemes (HVCFs). The Enterprise Capital Fund was formed in the U.K., whereas, the Innovation Investment Fund was formed in Australia.

The UK government devised the program to provide growing startups an equity financing of £2 million ceiling. Under the program, the early stage funds, invested in the growing small and medium enterprises (SMEs) and startups, consist of private investment by the private investors with uncapped profit share and loan or equity from the government with capped profit share. A common structure of investment is one where there is an equal distribution of profit between private and public LPs. However, to increase the expected profits of private LPs, HVCF adopts a number of mechanisms where changes are made to the profit distribution, down-side protection, timings of investments, and the payment of operating cost related to the funds.

Although, SBIC wasn’t a complete success, yet, the governments that are in favor of equity enhancement programs followed its design and changed it to match their own requirements and preferences.

Issues Faced by High-Technology Companies

High tech organizations face three major issues when they try to access venture capital. Firstly, they do not have enough information about venture capitalists in the market and there are limited financial channels for technology companies. Secondly, organizations that seek public venture capital causes low demand for other VCs, and thirdly, these organizations need to have creative and dedicated management teams or else they face issues in convincing VCs to provide funds, which further widens the financial gap.

Role of Governments in a Developing Country to Counter the Issues of High-Technology Companies

Governments of different countries have taken measures to address these issues. For example, there is a “triple-helix model” that expresses a relationship between: University – Government – Industry to promote innovation in a society.

Innovation can be brought in industry and university via direct or indirect VC investment, government stock, enactment of laws, formulation of policies, and through the promotion of high-tech SMEs. Government can play its role in different ways, i.e., by having a creative function, through venture investment regulations and tax policies that directly leave an impact on VC market, and by other measures that indirectly affect VC industry, such as regulations and laws that govern the labor market, patent, stock market, pension funds, etc.

For example, there is a city in China called Suzhou where 75 percent of the science parks are backed by municipal public VC. A special institute, which is responsible to the Local Science Committee of the central Chinese government, was developed to administer these parks. The employees of the institute are directly recruited and trained by the government. Therefore, as a developing country progresses in becoming a developed nation, a shift in the role of public VC arises from its direct participation in the market environment to provision of services.

Governments usually provide support to the Venture Capital markets due to perceived market failure or financing gap faced by startups or early stage businesses, and also due to the positive impact it will have to bring innovation and create job opportunities for a prosperous economy.